In March 2026, nearly 2,000 legal and compliance professionals in the financial services industry attended SIFMA’s annual Compliance & Legal Seminar in Orlando, Florida. This article recaps some highlights and overarching themes, including the current regulatory landscape, litigation, and arbitration trends, emerging technology, and the complex issues that arise for firms providing services to high-net-worth (“HNW”)/ultra-high-net-worth (“UHNW”) clients.

SEC and FINRA Insights

U.S. Securities and Exchange Commission (“SEC” or the “Commission”) Chair Paul S. Atkins outlined what he calls the Commission’s “ACT” agenda—Advance, Clarify, Transform—emphasizing clarity, predictability, and modernization, and highlighting several priorities:

• A push to modernize the rulebook for digital assets, and a forthcoming “innovation exemption” that would give qualifying crypto projects a limited, time- and size-bounded period to operate without immediate enforcement risk, aimed at clarifying jurisdictional lines with the CFTC rather than creating permanent safe harbors.
• Moving away from “regulation by enforcement,” including by providing more clarity on when tokens are treated as securities versus commodities.
• Planned proposals to make electronic delivery of disclosure documents the default, with paper as an opt-out, and to revisit the Advisers Act pay-to-play rule, which Atkins described as a “trap for the unwary” lacking materiality limits and raising free-speech concerns.

Separately, the SEC has flagged forthcoming rule proposals on crypto assets and hedge-fund reporting via Form PF, signaling continued rulemaking in both areas.

FINRA’s CEO also underscored modernization efforts, including a board-approved proposal to make e-delivery the default, subject to investor opt-out, an extension of the exam backstop from four to six years, streamlining of FINRA information requests, including blotter and blue sheet requests, and the launch of the Financial Intelligence Fusion Center as a cyber-threat clearinghouse.

Enforcement and Exams

Despite more measured rhetoric, both the SEC and FINRA continue to focus on Regulation Best Interest (“Reg BI”) implementation and retail sales practices, particularly where complex or illiquid products are recommended to older investors or those saving for retirement or college. Specific areas of focus include recommendations about products and investment strategies, processes for reviewing reasonably available alternatives, analysis of rollovers and account-type recommendations, and conflict-identification and mitigation practices.

Recent SEC and FINRA actions involving Reg BI and complex products highlight how conflict‑of‑interest and disclosure themes are also prevalent on the enforcement side.

State Laws and Regulation Trends

State securities regulators continue coordinated Reg BI sweeps, focusing on complex, costly, and risky products and on how firms handle alternatives and conflicts, often with longer statutes of limitations than comparable federal proceedings. NASAA’s updated non-traded REIT guidelines impose a standardized 10% concentration limit, with an accredited-investor exception, higher income and net-worth thresholds that adjust for inflation, and clarified conduct standards for REIT recommendations.

Panelists also highlighted new “trapped at work” legislation that could affect the common practice of paying advances to financial advisors secured by promissory notes. California’s recently enacted Assembly Bill 692, which applies to employment contracts entered into on or after January 1, 2026, prohibits employment contract provisions that would require an employee to pay back a debt upon termination or permits an employer to sue a former employee to collect on a debt. Similarly, New York’s “Trapped at Work Act” prohibits promissory notes requiring employees to repay their employers for training-related costs if they leave before a set time, and contains language ambiguous enough to perhaps affect arrangements beyond training-related costs.

Standards of Care

Multiple panels focused on the difficulties that firms face in their efforts to comply with overlapping standards of care for broker-dealers, investment advisers, and retirement-plan fiduciaries.

• Advisers Act. The SEC’s interpretation of the Advisers Act imposes a fiduciary duty of care and loyalty, including best-interest advice, best execution, and full and fair disclosure of material conflicts with informed consent.
• Reg BI. Broker-dealers must satisfy Reg BI’s disclosure, care, conflict-of-interest, and compliance obligations for recommendations to retail customers, with heightened attention to complex products, rollovers, and conflicts tied to affiliated products and compensation.
• ERISA / PTE 2020-02. Following vacatur of DOL’s 2024 rule, PTE 2020-02 remains the operative exemption for conflicted retirement advice, including one-time rollover recommendations. Rollover recommendations and oversight of vendors and service providers still remain subject to both Reg BI and ERISA impartial-conduct standards.

State-law initiatives, including Massachusetts’ and Nevada’s fiduciary rule for broker-dealers and NASAA’s Model Rule, continue to influence expectations by, for example, incorporating Reg BI’s duty of care for investment recommendations to retail customers and, in Massachusetts and Nevada, effectively imposing a statutory fiduciary duty.

Dual Registrants, Digital Platforms, and AI

Panelists addressing litigation and arbitration trends reported more cases against dual registrants, with plaintiffs/claimants often seeking to recast point-in-time brokerage recommendations into broader fiduciary relationships. Firms were encouraged to clarify when a representative is acting in a brokerage versus advisory capacity, consistent with existing regulatory guidance. They were also encouraged to maintain contemporaneous documentation of how the applicable standard was satisfied at the time of each recommendation and to be prepared to separate the story by moment, account, and capacity in arbitration.

As for self-directed models, panelists underscored that Reg BI and supervision obligations can be triggered when communications become sufficiently personalized, analogizing generic “Top 10”-style lists, which are typically informational, to profile-based, personalized prompts tied closely to a trade flow that may be viewed as recommendations.

Firms described expanding AI use for surveillance, marketing review, client communications, and analytics, while regulators emphasized that existing rules are technology-neutral and expect governance, testing, and controls around hallucination, bias, data use, disclosures, and conflicts where AI informs trading, recommendations, or client-facing tools.

Panelists also warned that content generated by nonlawyers using AI tools, including logs otherwise containing privileged information, generally will not be privileged and may be discoverable.  In addition, speakers recommended including AI-related provisions into existing confidentiality, technology-use, and ESI protocols rather than treating AI as a standalone issue.

HNW/UHNW Clients

Panels on the complexities that firms face providing services to family-office and HNW/UHNW clients emphasized that, for many purposes, these clients are considered retail investors under Reg BI and many state regimes, even when served through bespoke platforms combining brokerage, advisory, bank, or trust, and other services. Further, younger generations increasingly expect broader access to alternatives, digital tools, and integrated tax and estate planning, heightening the importance of clear capacity disclosures, carefully structured referral and co-advice arrangements compliant with the Advisers Act Marketing Rule, and robust documentation of conflicts for these clients.

Litigation and Arbitration

Litigation panels highlighted continued evolution in securities class actions, including more reliance on Rule 10b-5, close scrutiny of Item 303 theories, and rigorous Comcast-style damages reviews, as well as an unsettled aiding-and-abetting landscape across Ponzi, ESG, and terrorism-related claims. They also flagged that AI-generated content and off-platform communications can become central evidence in these cases.

On the arbitration side, off-channel communications—texts and messaging apps—remain central in many FINRA arbitrations, both as a basis for supervision claims and as evidence in contested hearings, underscoring the need for early identification, collection, and retention, and strategic use of such communications in motion practice and at hearing.

FINRA’s CEO highlighted the continued efforts to modernize the FINRA arbitration process, including discussions on alternative arbitration forums when investor harm is not a concern, permitting limits on punitive damages awards, and making data about the number of “large” awards (over $5 million) publicly available.

Speakers highlighted that, effective March 30, 2026, FINRA Rules 12808 and 13808 will allow parties to request expedited proceedings based on age or health condition. The latter only requires a certification that the party has received a medical prognosis or diagnosis and “reasonably believes” that accelerated processing is necessary to prevent prejudice. Panelists urged firms to factor compressed timelines into internal investigations, case assessment, and witness preparation.

Top Takeaways and Action Items

• For HNW/UHNW referral and “full service” models, assess how the firm uses internal and external professionals, including tax, estate, banking, and investment banking, and ensure referral arrangements, marketing language, and “one-stop shop” descriptions comply with the Advisers Act Marketing Rule and accurately describe who is providing which service and in what regulated capacity.
• Analyze compensation arrangements and practices that may implicate New York or California law against emerging trapped-at-work and stay-or-pay statutes and proposals, and assess their effect on future disputes involving the commonplace use of advances secured by promissory notes.
• For arbitration claims involving dual-registrants, build the defense around moments, not labels: identify each recommendation, in which account, at what time, and in which capacity, and prepare the advisor to testify in those terms rather than in holistic “trusted advisor” narratives that invite fiduciary-everywhere framing.
• In litigation involving off-channel communications, move quickly on custodian interviews and collections, involve supervision and compliance early, and use discovery motion practice and pre-hearing motions, including motions in limine, to educate arbitrators and avoid being surprised or framed as having buried the firm’s head in the sand. Treat off-channel messages as a two-edged credibility tool: mine texts and chats both to impeach claimants and to show authorization, strategy discussions, and post-event reactions that support defense narratives.
• For matters involving claimants seeking expedited proceedings, factor accelerated hearing rules into case assessment and early-case strategy, including realistic timelines for investigation, expert work, and dispositive motion practice.
• Warn non-lawyers that (i) their communications with public AI platforms are not privileged, (ii) the use of otherwise privileged communications on these platforms may waive privilege, and (iii) client‑generated AI materials created without direction from counsel likewise are unlikely to qualify as protected work product.
• Ensure that confidentiality agreements and protective orders expressly address the use of AI, prohibiting opposing counsel from uploading documents designated “Confidential” or “Highly Confidential” into public AI tools, and make clear that doing so constitutes a prohibited disclosure.